GLOBAL M2 LIQUIDITY & CREDIT — WEEKLY MEMO
Week Ending 2026-08-21
The week was a policy repricing, not a plumbing event: US net liquidity was nearly flat at -$6.8B (TGA -$23.0B offset by RRP +$15.6B and a -$14.3B balance-sheet decline) but the July FOMC minutes revealed three dissents for a 25bp HIKE and that "many participants assessed that policy tightening would likely be necessary if inflation did not decline", moving the Fed Rate Path score to -50 and URLI to -15.50.
GMLCI Score
+24.00
Mild global liquidity support
Global M2 Momentum
+50
Broad money trend
USD-Adjusted M2
+20
FX-adjusted research proxy
Central Bank Liquidity
+0
Fed / ECB / BOJ / PBOC / BOE
Credit Impulse
+0
Quantity, breadth, pricing
Funding / Dollar
+0
HY OAS 2.75%
Risk Transmission
+50
BTC 24.1% wk
Gold (XAU/USD)
$4,591
5.2% weekly
Executive Conclusion
Supportive
- US M2 5.5% YoY (2026-06); Euro area M3 3.3% YoY (2026-06).
- China M2 CNY 355.51T, 7.7% YoY (2026-07).
- US HY spreads at 2.75% with a 8bp weekly move.
Restrictive
- No new China release this week — July data (published Aug 14) carried forward: TSF stock 463.27T CNY (+7.4% YoY), July new social financing 1.40T CNY (+271B YoY) driven almost entirely by government bond issuance, and new RMB loans contracting -340B, the largest monthly decline on record. M2 +7.7% YoY (355.51T CNY). Next release mid-September.
- Broad USD index moved -0.1% over the weekly window.
- BTC changed 24.1% and gold 5.2% over the week.
Main Warning
- Bitcoin +24.1% (largest weekly gain in ~2 years) and gold +5.2% to ~$4,590 rallied while the S&P 500 fell -1.4%, the Nasdaq -2.1% and HY spreads widened +8bp — a fiscal-debasement bid (federal debt past $40T, 30Y yields at multi-decade highs before Treasury doubled long-end buybacks) rather than a liquidity-expansion move. The underlying liquidity data do not support a risk-on read.
POSITIVE GMLCI +24.00 — Mild global liquidity support.
GMLCI — Global M2 Liquidity & Credit Index
GMLCI = 0.30 x Global M2 Momentum + 0.20 x USD-Adjusted M2 + 0.15 x Central Bank Liquidity + 0.15 x Credit Impulse + 0.10 x Funding/Dollar Stress + 0.10 x Risk Transmission
| Component | Weight | Score | Contribution |
|---|---|---|---|
| Global M2 Momentum | 30% | +50 | +15.00 |
| USD-Adjusted M2 | 20% | +20 | +4.00 |
| Central Bank Liquidity | 15% | +0 | +0.00 |
| Credit Impulse | 15% | +0 | +0.00 |
| Funding / Dollar Stress | 10% | +0 | +0.00 |
| Risk Transmission | 10% | +50 | +5.00 |
| Metric | Value |
|---|---|
| Weekly GMLCI | +24.00 |
| 4-week moving average | +22.06 |
| 13-week moving average | +19.71 |
GMLCI history (release-aware)
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-08-21 | +24.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-08-14 | +19.00 | +50 | +20 | +0 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-08-07 | +27.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-07-31 | +18.25 | +50 | +20 | +5 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-07-24 | +21.25 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
Show 57 earlier entries
| Week | GMLCI | Global M2 | USD-Adj | Credit | Read |
|---|---|---|---|---|---|
| 2026-07-17 | +18.25 | +50 | +20 | +5 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-07-10 | +23.75 | +50 | +20 | +5 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-07-03 | +25.25 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-06-26 | +12.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-06-19 | +22.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-06-12 | +8.50 | +50 | +10 | -20 | NEUTRAL / MIXED |
| 2026-06-05 | +14.50 | +50 | +40 | -10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-29 | +22.50 | +60 | +30 | -10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-22 | +11.00 | +50 | +10 | -20 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-15 | +23.00 | +50 | +20 | +10 | MILD GLOBAL LIQUIDITY SUPPORT |
| 2026-05-08 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-05-01 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-04-24 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-04-17 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-04-10 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-04-03 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-03-27 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-03-20 | -7.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-03-13 | -6.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-03-06 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-02-27 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-02-20 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-02-13 | -0.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-02-06 | -14.00 | +0 | +0 | +0 | MILD GLOBAL LIQUIDITY DRAG |
| 2026-01-30 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-01-23 | -0.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-01-16 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-01-09 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2026-01-02 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-12-26 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-12-19 | -7.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-12-12 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-12-05 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-11-28 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-11-21 | -10.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-11-14 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-11-07 | -10.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-31 | +5.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-24 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-17 | -10.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-10 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-10-03 | +2.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-09-26 | -6.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-09-19 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-09-12 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-09-05 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-29 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-22 | -6.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-15 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-08 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-08-01 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-07-25 | +5.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-07-18 | -3.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-07-11 | +2.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-07-04 | +7.50 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-06-27 | +5.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
| 2025-06-20 | +0.00 | +0 | +0 | +0 | NEUTRAL / MIXED |
Each weekly score uses only releases public by that week ending; history is not rewritten when later data arrives. The gauge ranks only the FRED-derived 20% market tier — Funding/Dollar Stress plus Risk Transmission — versus frozen 2020+ history. The four judgment components are outside this lens; the full GMLCI is not percentile-ranked.
Market-Stress Alert
| Alert | Status | Notes |
|---|---|---|
| Market-Stress percentile (20% tier) | POSITIVE | Market-Stress (20% tier) = +5.00 ranks in the 90th percentile of weeks since 2020 (N=155). This ranks only Funding/Dollar Stress and Risk Transmission; the full GMLCI is not percentile-ranked. |
Global Liquidity Dashboard
Broad money (release-aware)
| Bloc | Level | Growth | Reference Month | Read |
|---|---|---|---|---|
| US M2 | $23.16T | 5.5% YoY | 2026-06 | POSITIVE |
| Euro area M3 | — | 3.3% YoY | 2026-06 | POSITIVE |
| China M2 | CNY 355.51T | 7.7% YoY | 2026-07 | POSITIVE |
| Japan M2 | JPY 1297.0T | 2.2% YoY | 2026-07 | POSITIVE |
| UK M4ex | — | 5.0% YoY / £14.6B flow MoM | 2026-06 | NEUTRAL |
Market transmission (weekly)
| Series | Latest | Weekly Change | As Of | Read |
|---|---|---|---|---|
| Broad USD index | 118.90 | -0.1% | 2026-08-14 | NEUTRAL |
| US HY OAS | 2.75% | 8bp | 2026-08-20 | NEUTRAL |
| S&P 500 | 7,674.37 | -1.4% | 2026-08-21 | NEGATIVE |
| Nasdaq Composite | 26,180.45 | -2.1% | 2026-08-21 | NEGATIVE |
| Bitcoin | $78,127 | 24.1% | 2026-08-21 | POSITIVE |
| Gold (XAU/USD) | $4,590.51 | 5.2% | 2026-08-21 | POSITIVE |
Monthly releases are carried forward until a new official release is public. Market series use the latest observation available by the report week. Funding/Dollar Stress and Risk Transmission scores are FRED-derived from the market inputs shown above. Gold is a tracked confirmation layer, not an independently scored GMLCI component.
Central Bank Liquidity
| Central Bank | Latest Input | Read | Notes |
|---|---|---|---|
| Federal Reserve | US URLI memo (companion report) | NEUTRAL | See the US memo for reserves, TGA, RRP, and net-liquidity plumbing. |
| ECB | EUR 5,927.3B / +4.3B wk | POSITIVE | Policy-purpose securities changed -0.2B (statement 2026-08-14). |
| BOJ | M2 2.2% YoY | POSITIVE | Money-stock reference month: 2026-07. |
| PBOC | M2 7.7% YoY | NEUTRAL | No new China release this week — July data (published Aug 14) carried forward: TSF stock 463.27T CNY (+7.4% YoY), July new social financing 1.40T CNY (+271B YoY) driven almost entirely by government bond issuance, and new RMB loans contracting -340B, the largest monthly decline on record. M2 +7.7% YoY (355.51T CNY). Next release mid-September. |
| BOE | M4ex 5.0% YoY | NEUTRAL | Reference month: 2026-06. |
Global Credit Map
| Credit Layer | Latest | Read | Notes |
|---|---|---|---|
| US bank credit (H.8) | $19,796.2B / +9.4B wk | POSITIVE | Released 2026-08-21; observation covers 2026-08-12. |
| C&I loans | $2,933.1B / +8.4B | POSITIVE | Business-credit channel. |
| Real-estate loans | $5,822.2B / +8.2B | POSITIVE | Credit-breadth channel. |
| Consumer loans | $1,916.6B / +2.0B | POSITIVE | Household channel. |
| China TSF / RMB loans | Release-aware read | NEUTRAL | No new China release this week — July data (published Aug 14) carried forward: TSF stock 463.27T CNY (+7.4% YoY), July new social financing 1.40T CNY (+271B YoY) driven almost entirely by government bond issuance, and new RMB loans contracting -340B, the largest monthly decline on record. M2 +7.7% YoY (355.51T CNY). Next release mid-September. |
| BIS cross-border / FX credit | Quarterly context layer | NEUTRAL | BIS total credit and Global Liquidity Indicators; not a weekly datapoint. |
| Credit pricing | HY OAS 2.75% (8bp) | NEUTRAL | Market-pricing confirmation layer. |
NEUTRAL Credit is scored as a layered transmission check, not a single headline datapoint.
Next Week Watchlist
Scheduled / probable focus
- Watch the July PCE print (Aug 26), which tests the minutes’ own stated condition for tightening; Chair Warsh’s first Jackson Hole keynote (Aug 28) for whether the leadership confirms the hawkish tilt; and $211B of 2Y/5Y/7Y/FRN coupon supply settling Aug 31, the mechanical driver of the projected ~+$28B TGA build and a -37.50 projected URLI.
- Monitor broad USD, HY spreads, and gold for confirmation or invalidation.
- Compare the companion URLI memo: global money can stay supportive while US plumbing drains risk liquidity.
Bull / Base / Bear Scenarios
| Scenario | Setup | Market Impact | Confirms / Invalidates |
|---|---|---|---|
| BULL | USD-adjusted M2 strengthens; China credit broadens; HY spreads stay tight. | Supports equities, EM, BTC, high beta. | Confirms: GMLCI > +40. Invalidates: USD spike or spread widening. |
| BASE | Broad money grows but credit transmission stays mixed. | Selective risk support. | Confirms: GMLCI +10 to +39. Invalidates: China credit weakens further. |
| BEAR | USD-adjusted M2 contracts; credit and funding stress worsen. | Risk-off, high-beta pressure. | Confirms: GMLCI < -40. Invalidates: USD weakens and credit broadens. |
Sources & Data Definitions
| Field | Source | Type |
|---|---|---|
| US M2 | Federal Reserve H.6 / FRED M2SL | Official |
| Euro M3 / loans | ECB monetary developments | Official |
| ECB balance sheet | ECB weekly financial statement | Official |
| China M2 / TSF | PBOC releases | Official |
| Japan M2 | BOJ money stock | Official |
| UK M4ex | BOE money and credit | Official |
| US bank credit | Federal Reserve H.8 | Official |
| USD / HY / equities / BTC | FRED DTWEXBGS, BAMLH0A0HYM2, SP500, NASDAQCOM, CBBTCUSD | Market |
| Gold spot | Public XAU/USD spot snapshots | Market (secondary) |
| Cross-border credit | BIS Global Liquidity Indicators | Official (quarterly) |
Funding/Dollar Stress and Risk Transmission are FRED-derived at week creation. Global M2 Momentum, USD-Adjusted M2, Central Bank Liquidity, and Credit Impulse remain documented research/judgment components until complete keyless feeds are available.